“Recommitting to the ‘triple lock’ means state pensions would under Labour keep increasing by the highest of 2.5%, price inflation or earnings inflation. This has recently provided state pensioners with inflation busting increases, with an expected 3.9% increase next April, around 2.5% above the latest price inflation figure.
“Allowing those in certain occupations to take their state pension early will be welcome by those who qualify but could increase demand for others to be granted more flexibility. Might there be potential to allow wider early access in return for a reduced level?
“The promise to pay some compensation to women who saw their state pension age increase from 60 to 66 or above is a potential vote winner for this group although the detail will be critical with some solutions particularly costly.
“Generosity to state pensioners does of course come at a cost, particularly as the UK continues to enjoy longer lives. There is no ‘fund’ to pay state pensions, with today’s state pensions being ‘paid as you go’ from National Insurance contributions from today’s workers who will face an increasing burden.”
A single pensions dashboard – a nudge towards nationalisation
“Labour’s intention to create a single publicly run pensions dashboard rather than the current Government’s support for a range of commercially run dashboards will restrict the private sector’s ability to offer this service to its customers. This could be seen as a nudge towards nationalisation.”
Private pensions
“Noticeable by its absence is any prominent indication that Labour would undertake a fundamental reform of the tax treatment of pensions. Any major reform would require extensive and detailed consideration and may not be seen as a priority at this time.
“Labour’s commitment to look to widen access for the low paid and self-employed to auto enrolment schemes is welcome and likely to be mirrored by all parties.”
Helen Morrissey, pension specialist at Royal London, said: “Labour has issued an ambitious series of pension commitments in its manifesto. Some such as the pledge to improve access to pensions for those on low incomes and the self-employed should be congratulated as should the pledge to establish an independent Pension Commission to plot a way forward for increased minimum pension contributions. However, others, such as the pledge to leave the State Pension Age at 66 and to compensate the 1950s women are likely to cost many billions of pounds and with no money set aside to meet these commitments it will be difficult to see how they can be funded. In addition, paying state pensions at a different age based on doing heavy jobs would be extremely difficult to implement in practice as there are no records of what job people were doing, and defining what counts and does not count as heavy work would be very difficult in practice.”
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